HAMADARD INSTITUTE OF MANAGEMENT SCIENCES

Term Report

MOBILE
COMMERCE

Submitted to: Mr. M. Faisal

Course: Management Information System

Submitted by: M. Faisal Panawala

GR # 2200649

Hamdard University, City Campus

Karachi.

April 12, 2007

 Hamdard Institute of Management Sciences

TABLE OF CONTENTS

S/ NO. DESCRIPTION PAGE NO.

01. INTRODUCTION 5
02. IMPORTANCE OF E-COMMERCE 6
03. LATEST TRENDS & COMSUMER
REACTION 7
04. HARDWARE 9
05. SOFTWARE 10
06. NETWORK 10
07. ADVANTAGES 11
08. DISADVANTAGES 11
09. NETWORK TECHNOLOGIES 12
10. LEGACY LIMITATIONS 15
11. POTENTIAL RISK 15

M. Faisal Panawala Page - 2 -

GR # 2200649
 Hamdard Institute of Management Sciences

April 12, 2006

Mr. Muhammad Faisal
Hamdard Institute of Management Sciences
Hamdard University
City Campus
Karachi.

Subject: LETTER OF TRANSMITTAL

Dear Sir,

With all due respect I am thankful to you for giving us a worth-while opportunity
to have the new experience which is not only fruitful in my present but also will
help me in future because of its practical nature and application.
Enclosed find herewith a term report on M-commerce. This report is prepared on
estimating “Importance, limitations & Potential risk of M-commerce”. In order to
make this report reliable, authentic and near to the facts, I tried our level best to
get as much information as I can.

Report is submitted for your kind perusal please.

Yours truly,

_________________________________________
M. Faisal Panawala
GR # 2200649

M. Faisal Panawala Page - 3 -

GR # 2200649
 Hamdard Institute of Management Sciences

ACKNOWLEDGEMENT

First of all I am grateful to Almighty Allah, for his blessings that enabled me to
understand and undertake the opportunity for completing this report with the right
approach and sense of direction.

I wish to express my sincere thanks to Mr. Muhammad Faisal, the respected

teacher for giving us an opportunity to work on a practical approach project and
giving us the guidance to complete the same.

I would also like to thank all the friends, colleagues and concerned persons who
helped me in the preparation of this report.

Special thanks go to all those who contributed in the formation of this report in
order to make it they tried their level best and in collected as much information as
they can.

M. Faisal Panawala Page - 4 -

GR # 2200649
 Hamdard Institute of Management Sciences

1. Introduction

M-commerce is the market of buying and selling goods with wireless technology
such as PDA’s and cellular phones primarily
within the retail, telecommunications and
financial services industries. Many phone
companies are enabling services for M-commerce
applications and marketing their products to
organizations who can utilize M commerce.
Wireless technology has brought its benefits to
M-Commerce and its challenges as well.

M-commerce can have easy portable access to the web with web-based
applications, but very slow data transfer speeds. Keypads of phones are sometimes
difficult to use especially when there is a need to enter text. Many companies use
the one button approach to make transactions easy when the data is on file. With
little graphics on the screen of most cell phones, buying this way requires prior
knowledge of transaction needs and M-Commerce techniques. The use of mobile
technology is primarily used for email and messaging as well as weather alerts and
reminders.

Though ecommerce has grown as expected, M-Commerce has not taken off the
same way for the use of goods and services. Wireless services are not everywhere
and consumers often do not feel safe or happy buying with their phone. As
technology increases this may change. As for now Consumer’s use M-commerce
as a portable friend to communicate and to do transactions. When consumers feel
secure, they buy. As the younger generation grows with wireless business models
will further develop M-Commerce.

M. Faisal Panawala Page - 5 -

GR # 2200649
 Hamdard Institute of Management Sciences

Researchers see games as an avenue to attract more consumers as they become

more efficient with their phones. An area of promise for
M-Commerce is in the travel industry. A consumer stuck
in traffic or suddenly aware of an unexpected urgent
meeting has a need to pay for an airline/train ticket or
secure a hotel room. This is possible with M-Commerce.
Arranging business meetings or short conferences is a
common use of mobile communicating in the business
world. Buying stock over the phone is a convenience for
some. Retail consumers still enjoy browsing at stores or
through catalogs. Internet shoppers prefer wide-screens that can hold the graphics
that mobile phones usually do not. Many consumers are not familiar enough with
accessing their voice mail, let alone making major purchases with tiny keypads
and sequence shopping. As technology becomes more common in the consumer’s
lifestyle, business models will become more apparent for M-Commerce.

2. The Importance of E-Commerce in today’s economy

E-commerce has become an

essential part of our nation’s
economic growth in the past
years. With the emergence
and fall of numerous
dot.com companies, the
government can no longer
consider e-commerce a
technological phase. In June 1999, the Center for Research in Electronic
Commerce at University of Texas, Austin was the first to study, and recognize e-

M. Faisal Panawala Page - 6 -

GR # 2200649
 Hamdard Institute of Management Sciences

commerce as a separate entity (the internet economy) in the nation’s economy.

The study determined that the Internet economy generated approximately $301
billion in revenues in 1998 and created over 1.2 million jobs. This is particularly
note worthy since dotcom’s make up only 9.6 percent of all online businesses.
(According to the report “Measuring the Internet Economy”.) Experts continue on
to state that with the slowing of the “non-technical” economy, the “internet
economy” will slow as well; however, not at the rate the “non-technical” economy
will. Now comes the question as to why? Unlike the “non-technical” economy
that mainly relies on domestic consumers, the “internet economy” has a larger
number of elements involved, such as business-to-business transactions, business
to consumer, and the international markets. Needless to say, without the “internet
economy” the Untied States would not have enjoyed the economic boom that it
has for ten years.

3. Latest Trends & Consumer reactions

The latest trends of e-commerce include electronic bill pay, digital signatures,
online banking just to name a few. Electronic bill pay is essentially paying your
household bills over the internet. In most cases, it works
like this. The consumer subscribes to an EBP provider,
deposits funds (or you allow them access to your bank
account) with them and as the consumer receives their
bills in the mail, they in turn email them to their EBP
provider with the date that they want the invoices paid.
What can go wrong? Plenty Consumers have registered
complaints with the Federal Trade Commission stating
that the EBP providers were not paying their bills in time. Therefore, consumers
were assessed late charges and damaging credit ratings. This service has

M. Faisal Panawala Page - 7 -

GR # 2200649
 Hamdard Institute of Management Sciences

improved since it was first offered a few years ago. The security has increased
and the government now keeps a closer eye on this type of business.

Digital signatures are the latest from the e-commerce

world. This allows consumers to sign legal documents
across the country without being physically there. This
latest trend has really taken off in the housing market.
Allowing prospective buyers to sign closing contracts with out taking time off is
wonderful. Consumers love this idea. These contracts are legally binding and
hold the same weight in court as if you were there in person. The major draw back
to this type of service is identity theft. This has become an increasing problem
through out the year. Consumers and businesses alike have yet to come up with a
viable option to correct this problem. The FTC suggestion was to only do
business with the businesses that consumers are familiar. However, this does not
help emerging companies trying to enter the marketplace.

Online banking is the banking industry to compete with on another and with the
electronic bill pay providers. Online banking allows consumers to check their
balances, pay bills, purchase certificate of deposits and apply for loans all from the
consumers’ home. This is a wonderful service that the
banking industry has offered. The draw back for consumers
is with servers crashing and hackers downloading your
banking information. Whereas, the banking industry has
taken extreme measures to ensure the consumers privacy no
system is hacker proof. Consumers can protect themselves
by not downloading their banking information at the same
time (they need to do it at varying times) according to banking experts.

M. Faisal Panawala Page - 8 -

GR # 2200649
 Hamdard Institute of Management Sciences

From the advantages and the disadvantages, the economic weight to the latest
trend e-commerce is no longer an emerging force. E-Commerce is a force that has
a strong presence not only in the Untied States but internationally as well.

4. Hardware:
Mobile computing device - be it, a notebook, hand-
held computer, pen computer, PDA, PalmOS
compatible PDA, Symbian EPOC handheld device,
Windows CE/Pocket PC device, or a modern
smart phone with Wireless Internet connectivity
A suitably-configured wire line or wireless WAN
modem, wireless LAN adapter, or a flash card
either as a distinctly separate accessory or embedded on the device - as is the trend
now.
A Web Server with wireless support, WAP gateway, a Communications Server
and/or MCSS (Mobile communications server switch) or a wireless gateway
embedded in wireless carrier's network - this server provides communications
functionality to allow the handheld device to communicate with the Internet or
Intranet infrastructure. An application or database server (the hardware piece) with
application logic and business application database - tier 2 server
Optionally, a large enterprise application server (tier3) in the form of a UNIX
super server, IBM’s AS/400 server or IBM's OS/390 mainframe.

5. Software:
Mobile client OS-type software that resides in the mobile device - it may be
Windows98/2000/NT, PalmOS, Win CE (or Pocket PC), EPOC, a specialized OS
like Blackberry, or a Web browser

M. Faisal Panawala Page - 9 -

GR # 2200649
 Hamdard Institute of Management Sciences

Mobile application user interface with application logic in a handheld PDA, smart
phone, Palm or a Wintel notebook. In the Internet world, it is often under the
control of a browser or micro browser.
Wireless middleware that links multiple wireless
networks to application servers. Data synchronization
software that synchronizes data in the mobile device with
the network server or the backend server
Mobile Device management software like: XcelleNet's Afaria, Synchrologic
Mobile suite or Mobile Automation's MA2000. Finally, the most useful software -
end user application like messaging, sales force automation, public query, data
collection, etc.

6. Network
A wireless network - this may be either a private network that police agencies and
emergency health services use or a public shared network
that is provided by network providers, such as Cingular
(formerly Bell South Wireless Data), Verizon, Sprint
PCS, Nextel, Bell Mobility (Canada) , Roger's AT&T
(Canada), Vodafone in Europe, BT in UK, NTT
DoCoMo (Japan), etc.
While wireless network provides true mobility, you may utilize a wire line
network for those mobile users who need occasion connection from hotels, motels
or airport lounges of airline's regular patrons. Some of these airports are now
offering wireless LAN connectivity to wire line backend networks.

M. Faisal Panawala Page - 10 -

GR # 2200649
 Hamdard Institute of Management Sciences

7. Advantages of M-commerce

• Ubiquity: the end user device is mobile, that is the user can access
applications in real time at any place.
• Security: depending on specific end user device, the device offers a certain
level of inherent security. For example SIM card employed in mobile stores
confidential user information such as secret authentication key.
• Localization: a network operator can localize registered users by using
positioning systems, such as GPS, GSM or UMTS network technology.
• Convenience: the size and weight of mobile device and their ubiquity and
accessibility makes them an ideal tool for performing personal tasks.
• Personalization: mobile devices are not usually shared between users.
Mobile operator can offer personalized services to its users.

8. Disadvantages of M-commerce

• Mobile devices offer limited capabilities such as limited display

• The heterogeneity of devices, operation systems and network technologies
is a challenge for a uniform end user platform.
• Mobile devices are more prone to theft & destruction.
• The communication over the air interface between mobile device and
network introduces additional security threats.

M. Faisal Panawala Page - 11 -

GR # 2200649
 Hamdard Institute of Management Sciences

9. Network technologies of M-commerce

GSM
Global System for Mobile Communication (GSM) is the current European
standard for mobile communications. GSM handsets are popular and widespread,
they have to be considered as the major device for mobile commerce at the
moment. The data services provided are

• SMS (short message service) allows the exchange of 160 character short
messages over the signaling channel.

M. Faisal Panawala Page - 12 -

GR # 2200649
 Hamdard Institute of Management Sciences

• WAP (wireless application protocol) permits access to internet content and

applications formatted in WML (wireless markup language)
• HSCSD (high speed circuit switched data) provides higher data rates by
channel handling.
• GPRS (general packet radio service) extends GSM with packet oriented
services. GPRS can also be used as a bearer service for WAP & SMS.

UMTS
Universal Mobile
Telecommunication System) is
the next generation (3G) mobile
telecommunication system and a
further development of GSM. In
general, the security architecture
of UMTS is carefully designed to
fix the security weakness of
GSM. Crucially, 3G/UMTS has
been specified as an integrated
solution for mobile voice and data
with wide area coverage.
Universally standardized via the Third Generation Partnership Project
(www.3gpp.org) and using globally harmonized spectrum in paired and unpaired
bands, 3G/UMTS in its initial phase offers theoretical bit rates of up to 384 kbps in
high mobility situations, rising as high as 2 Mbps in stationary/nomadic user
environments. Symmetry between uplink and downlink data rates when using
paired (FDD) spectrum also means that 3G/UMTS is ideally suited for
applications such as real-time video telephony - in contrast with other technologies

M. Faisal Panawala Page - 13 -

GR # 2200649
 Hamdard Institute of Management Sciences

such as ADSL where there is a pronounced asymmetry between uplink and

downlink throughput rates.

WLAN
The IEEE standard 802.11 specifies families of wireless local area networks
(WLAN) which operate in the unlicensed 2.4 GHz and 5 GHz band.

Bluetooth
Bluetooth is a wireless technology developed by the
Bluetooth Special Interest group and is mainly aiming at
ad hoc Pico nets and connections to peripheral devices.
Bluetooth technology will probably often be used in the
future to connect devices in the personal environment
which makes it relevant for M-commerce.

M. Faisal Panawala Page - 14 -

GR # 2200649
 Hamdard Institute of Management Sciences

10. Legacy Limitations

More than ever, subscriber demands are driving innovation in

telecommunications. Whether it’s a teenager downloading a ring tone to his cell
phone, a businesswoman text messaging her assistant, or a remote employee
retrieving email on his personal digital assistant (PDA), consumers and businesses
are demanding mobility, “always-on” access, and ease of use at the user level-and
more critically, at the device level. In short, consumers want more control over the
selection and management of their services, including how and when they pay for
them. Service providers must work to enhance user loyalty by providing relevant
options that are continuously improved and enhanced as market demands and
technologies evolve.
These changes in the communications landscape have a profound effect on the
billing environment and its business and operations support systems (BSS/OSS).
Most existing BSS/OSS lacks the flexibility to quickly integrate new service
offerings, effectively creating barriers between customers and the products they
want to buy. These impediments can lead to inefficient product delivery which, in
turn, leads to higher churn rates. Because of the limitations of legacy systems,
service providers can, at best, only control the customer experience in a reactive
manner and they lose the ability to adapt quickly and take advantage of new
opportunities.

11. Potential Risks

Consumer organizations are becoming increasingly concerned that the risks of

mobile commerce have not been addressed adequately. In August 2005, the Trans
Atlantic Consumer Dialogue issued a resolution outlining the following risks:
1. Unfair marketing and unfair business practices: Products and services may
be misrepresented by vendors. Insufficient (or hard to read) details about the

M. Faisal Panawala Page - 15 -

GR # 2200649
 Hamdard Institute of Management Sciences

goods and the terms and conditions of sale may be provided. Spam may increase.
And marketing may be targeted at children and other vulnerable consumers, who
may not have the capacity or authority to make purchases
2. Lack of security of financial information: There are concerns about the
security of consumers’ financial information. Information could be intercepted in
transmission or obtained surreptiously
3. Unauthorized purchases: Unless there is a PIN or some other form of
authentication required, it is easy to use someone else’s mobile without their
consent
4. Problems obtaining redress: When things go wrong, it may be hard for
consumers to prove the details of transactions, if the purchase details are not
recorded (for example, on mobile phone bills)
5. Illegal activities: Mobile phones, like other forms of technology, can be
misused if consumers access illegal content (such as child pornography); and
6. Privacy and discrimination: Vendors may collect information about what
consumers buy and where they go, and use it for unauthorized purposes, including
sharing it (without consent) with others. This may, for instance, lead to more
intrusive marketing.
The information collected could also be used to identify the most profitable
consumers to offer them the best deals, leaving the less profitable consumers
increasingly excluded from markets.

M. Faisal Panawala Page - 16 -

GR # 2200649